The January Employment Report Shows Things Aren't as Rosy as Some Want to Believe

While the pundits and press gush over this month's employment report, things are still not rosy. The new official unemployed tally is 12,758,000. The average length of unemployment is still very high, 40.1 weeks.

People unemployed for 27 weeks or more is now 42.2% of the total unemployed, or 5,518,000 million. This number has barely budged as a percentage of total unemployed in comparison to pre-recession and historical levels.

Some people are in part-time jobs because they want to be, others because they cannot find anything else. Some are stuck in part-time because they got their hours cut by their employer and these part-timers now number 5,372,000.

Below is a graph of forced part-time because they got their hours cut as a percentage of the total employed. If you want to see a recession economic indicator, this looks like a pretty damn strong one. See how closely the percentage increase matches recessions, the gray bars? The percentage of people in part-time jobs due to slack economic conditions has stayed extremely high since the start of the Great Recession, even while declining.

U-6 is a broader measure of unemployment, includes the official unemployed, people stuck in part-time jobs and a subgroup not counted in the labor force but are available for work and looked in the last 12 months. U-6 has also remained consistently high. In January U-6 was 15.1%.

The real number of people wanting a job for January is 27.31 million. One needs to add up the official unemployed, people stuck in part-time who need full-time jobs, and all of those people not in the labor force, but who report they actually want a job, currently at 6.32 million. This gives an unemployment rate of 17%, calculated following the methods from this article on estimating the real unemployment numbers.

Another indicator things are not so rosy is the number of discouraged workers remains highly elevated. Discouraged workers are people, not counted as part of the civilian labor force, who not only want a job, but also looked for one in the last year. These people aren't job hunting now because they believe there are no jobs out there. Below is the graph of discouraged workers, currently at 1.06 million.

A final area of contention is figuring out how many jobs are needed each month to keep up with population growth. Seems many in the press just throw out a number. We just don't know due to civilian non-institutional population fluctuation. We do know that overall population monthly growth has been hovering around 200,000 a month and we also know the civilian non-institutional population is roughly 75% of the total population. We also know the labor participation rates and employment to population ratios are artificially low. Therefore, it's safe to say we need about 100,000 jobs per month to keep up with population growth. As the months go by, we can calculate the how many jobs are needed to keep up with population estimate with more accuracy. The monthly civilian non-institutional population growth statistics should become less fluctuating and are now derived from the base 2010 Census results.

Forum Categories:

Every one picks the statistic that suits him well.
The News and Media Industrie always picks the Hyped up one.
If it fails the have a reason to write a correction the next day.
The avarage Unemployment did not get better at all. It cant.
The hausing is still depressed, we have not enough production in the US itself , and there are on the same news page plenty of Job Layoff anauncments.

So like it or not it will take a long time to get better , so be carefull with your spending.
And if the gasprice goes up again the economy will nosedive again.
Because of a depressed income situation there is not enough liquidty to keep spending ,to fill the car is priority and the other stuff has to wait , results in a nosedive again , its always a delay from about 60 to 90
Days until people get the Creditcard outmaxed.

One mayor economy push would be a stable gasoline price, but with wild swings from 10 to 15 % this wont happen. In the moment the Gas price is up the economy breakes are on. One way to solve this would be a Pay increase but the wages are actually down and not up.

The minimum wage should be linked to the Gasoline price,because of the major impact gasoline has.

Chris Schmidt

You must have Javascript enabled to use this form.

Your name

E-mail

The content of this field is kept private and will not be shown publicly.